Restrictions on building new houses on green field sites should be eased over the next three years to provide a fillip to the construction industry, according to Policy Exchange, a think tank.

The proposal prompted concern that such “bribes” would lead to more developments on green belt land. The report was published as Nick Boles, the planning minister who founded the think tank, was called to explain the Government’s own proposals to MPs.

Mr Boles said the government had already "radically simplified" planning rules to encourage "sustainable development".

Further measures announced last week will "speed up planning decisions and support economic growth," he said.

"I am confident that this is the best way to help more people realise their dreams of having a decent and affordable home of their own while protecting precious green spaces and our unique landscape."

George Osborne, the Chancellor, has said that planning laws could be streamlined to boost the economy. A Bill next month could detail moves to lift restrictions on development in the countryside. Policy Exchange suggested that curbs on green belt developments should be eased to address the housing shortage.

House prices are typically 20 per cent higher than the true value of property, partly as a result of a shortage of homes, the think tank said. The report urged the Government to introduce “short-term” reforms before 2015 to release new land on to the market for development.

Proposals should include urban developments on green field sites near existing cities and garden cities, where there is support from local people, it said, while councils should be stripped of their power to block such developments.

In the longer term, reforms should require developers to pay compensation to residents for building on green belt land nearby, and to ensure that new housing estates include outdoor spaces.

“Sadly, distrust of new development is so high (due to the failures of the planning system) that loss aversion may mean without such compensation new development on greenfield [land] will be difficult in the next few years,” the report said. Currently, developers pay compensation to councils which can be up to £30,000 for every new home built, but this money should instead go directly to local residents, the report suggested.

Clive Betts, the Labour MP and chairman of the local government select committee, said: “We have to be very careful about developers effectively paying a bribe to communities to accept something.”